ICL-Israel Chemicals Ltd.

Ammonia is used to make phosphate fertilizers like DAP (diammonium phosphate) and MAP (monoammonium phosphate).

Last week, potash prices continued to show weakness week-over-week. Prices were broadly flat to positive for the week ending April 21.

For 3Q17, PotashCorp’s overall gross margin expanded YoY (year-over-year) to 19%, up from 17% in 3Q16.

DAP (diammonium phosphate) fertilizer prices continued to hit new highs last week, which ended on August 24.

In the last 12 months, PotashCorp (POT) has earned about 36% of its total sales from its Potash segment.

Last week was mostly negative for agricultural fertilizer (FXZ) stocks. However, the VanEck Vectors Agribusiness ETF (MOO) ended the week in positive territory.

Agrium’s (AGU) Retail segment’s shipments declined by 0.03% to 4.84 million tons in 2Q16, down from 4.86 million tons in 2Q15.

PotashCorp’s 3Q16 sales PotashCorp’s (POT) business comprises the three major fertilizers—nitrogen, phosphate, and potassium (XLB). In 3Q16, the company earned about 38% [1. calculated as segment sales excluding freight, transportation and distribution costs divided by total sales excluding freight, transportation, and distribution costs] of its total sales from its Potash segment, 32% from its Nitrogen segment, and 30% from […]

Last week, MAP (monoammonium phosphate) prices in Brazil continued their uptrend, while prices in NOLA (New Orleans) moved sideways.

In the near term, analysts’ estimates for Intrepid Potash’s (IPI) sales fail to show a positive momentum.

Out of the 21 analysts surveyed by Bloomberg, 36% had a “buy” rating, 50% had a “hold” rating, and only 14% had a “sell” rating on Mosaic.

Mosaic (MOS) earned about 34.0% of its revenue and 28.0% of its gross margin from its International Distribution segment in 4Q16.

Ammonia is used to make phosphate fertilizers like DAP (diammonium phosphate) and MAP (monoammonium phosphate).

In the week ending January 20, average MAP prices in Brazil rose 2.1% to $343 per metric ton from $336 per metric ton the previous week.

Average DAP prices in China were flat at 2,669 Chinese yuan per metric ton last week. DAP prices in Morocco remained unchanged at $340 per metric ton.

The average DAP price at US Gulf NOLA for the week ended March 25 rose to $340 per metric ton ($308 per short ton) compared to $302 per metric ton ($333 per short ton) the previous week.

For phosphorous fertilizers, 2018 will be the year in which the biggest capacity additions will occur, according to PotashCorp (POT).

PotashCorp’s average potash selling price fell ~34.0% to $157 per ton in 4Q16, from $238 per ton in 4Q15. Potash prices in North America fell ~35.0%.

In 2018, Mosaic expects the global phosphate demand to be at 70 million metric tons.

For 2017, Mosaic (MOS) forecasts that global potash demand to be in the range of 61 million–63 million metric tons. This level would be higher than in 2016.

According to 21 analysts surveyed by Reuters, the median price target for PotashCorp over the next 12 months stood at $17, which is about 6.5% below the current market price.

Last week, MAP prices in both the locations rose on a weekly basis.

Due to the increase in potash prices this year, the overall potash segment margins for five companies discussed below expanded as much as 9% to 29% from 20% on average.

Out of 16 analysts surveyed by Bloomberg, about 50% have “buy” ratings for CF Industries (CF). About 44% have “hold” recommendations, and one has a “sell” rating for the company.

In 3Q16, Agrium’s Retail segment contributed 84% of total gross profit, with crop protection and crop nutrients making up the majority of segment sales.

Fertilizer prices constitute the biggest factor impacting the performance of fertilizer companies. In this series, we’ll see how NPK prices and the prices of raw materials changed in the week ended April 8, 2016.

The week ended March 10, 2017, was broadly negative for agricultural fertilizer stocks. Israel Chemicals (ICL) emerged as the top performer, falling ~3.7% to $4.43 per share.

Over the past ten-year period, CF Industries has risen 186.0% and significantly outperformed the S&P 500 Index’s rise of 69.2% over the same period.

MAP (monoammonium phosphate) prices last week continued their ascent.

For the week ending November 25, fertilizer affordability fell to 0.65x from 0.66x week-over-week.

On average, potash prices for these five producers fell ~33% YoY in 4Q16. Excess supply and weak demand added downward pressure.

The MAP (monoammonium phosphate) prices in Brazil saw positive momentum last week. Brazil is still a favorable market for fertilizer producers.

Last week, fertilizer affordability rose to 0.66x from 0.65x week-over-week. A ratio below one means that fertilizers are more affordable than during the base year.

PotashCorp reported diluted EPS (earnings per share) of $0.07 for 4Q16, which missed analysts’ estimate of $0.09 per share.

The Fertilizer Affordability Index has shown a downward trend since the beginning of the year. Fertilizers have become more affordable in 2017.

Last week, MAP (monoammonium phosphate) prices continued to fall and brought more pain for phosphate producers (NANR).

In the week ending March 17, 2017, the Fertilizer Affordability Index fell to 0.61x from 0.63x the previous week—better than last year.

Recently, China has been moving towards a zero growth policy. The country aims to reach zero growth in using agricultural chemicals by 2020.

China is one of the largest fertilizer consumers in the world. Investors are concerned that retaliatory measures might hurt fertilizer companies.

In the week ending April 7, 2017, fertilizer affordability didn’t change. Notably, the Fertilizer Affordability Index remained flat at 0.60x week-over-week.

According to Israel Chemicals’ June 2017 6-K filings, India imported 3.8 million tons of potash in 2017, while China imported 6.8 million tons of potash.

ScottsMiracle-Gro’s estimated earnings per share were revised down 1.0% from $4.56 to $4.53 for fiscal 2018.

For the week ending April 28, the Fertilizer Affordability Index fell slightly to 0.58x—compared to 0.59x the previous week.

In the week ending March 24, the Fertilizer Affordability Index rose slightly to 0.62x from 0.61x the previous week. Last year, the index stood at 0.66x.

Out of the 14 Wall Street analysts covering Israel Chemicals (ICL), only one has a “buy” recommendation on the company, 12 have a “hold” recommendation, and only one analyst has a “sell” recommendation.

Mosaic (MOS) continued to enjoy higher margins at 7%—compared to Agrium’s (AGU) margins at 5%. Mosaic’s margins were flat year-over-year.

In the week ending March 31, 2017, the Fertilizer Affordability Index fell slightly to 0.60x from 0.62x the previous week.

Last week, which ended December 8, 2017, MAP prices in Brazil fell week-over-week by 25 basis points to $402 per metric ton, from $403 per metric ton.

CVR Partners (UAN) emerged as the top gainer last week, rising 17.4% week-over-week to close at $3.70. CF Industries (CF) followed, rising 4.4% to close at $39.30.

The median gross margin for these companies’ phosphate segments was 14%, as a percentage of segment sales in 4Q15.

On November 9, wheat was trading at $4.1 per bushel—74 basis points higher than $4.03 in October and 17% lower than $4.9 per bushel in November 2015.

Recently, the Fertilizer Affordability Index has seen an upward trend.

MAP (monoammonium phosphate) prices hit a low of $343 per metric ton in August but have been on an upward momentum since then.

DAP prices at the Central Florida location fell as much as 1.5% week-over-week to $299 per metric ton from $304 per metric ton.

Nutrien (NTR) has a consensus recommendation of “buy.”

In its January report, the USDA (United States Department of Agriculture) reported that the world’s ending stock for wheat rose to 253 million metric tons from 252 million metric tons in December.

Despite the political instability, fertilizer imports into Brazil saw an overall increase year-over-year in 2016.

The Invesco European Growth Fund – Class A (AEDAX) fell 1.1% in December 2015 from the previous month.

Last week, the weekly price movement was broadly flat to negative. DAP prices at the US NOLA fell by as much as 96 basis points week-over-week.

Last week, the MAP prices in Brazil rose as much as 5.6% week-over-week to $394 per metric ton from $373 per metric ton a week ago.

There’s a handful of big players in the agricultural fertilizer industry. Setting up business requires huge capital, which makes for a high barrier to entry.

At the end of 2017, after receiving final regulatory approval for the merger, PotashCorp and Agrium combined into a new company called Nutrien (NTR).

Wheat prices traded at an average of $4.4 per bushel in 2016, lower than their average of $5.1 per bushel in 2015.

MAP (monoammonium phosphate) prices in Brazil have been on the rise lately from a low point of $343 per metric ton as a result of strong agricultural activity in the region.

After they merge, PotashCorp and Agrium (AGU) will be known as Nutrien, which will then be the largest crop nutrient company in the world.

In 2Q16, the Phosphate segment contributed close to 66% toward Mosaic’s gross margin, while the Potash segment contributed 33%.

Last week was broadly negative for agricultural fertilizer stocks. The VanEck Vectors Agribusiness ETF (MOO) fell 53 basis points, and SPY rose 42 basis points.

Fertilizers have displayed a high level of affordability this year, which has supported the strong demand for fertilizers.

Last week, the Fertilizer Affordability Index remained unchanged at 0.65x week-over-week. Fertilizers are more affordable than during the base year.

CVR Partners is expected to report a loss per share of $0.06 in the second quarter compared to a loss per share of $0.03 in the corresponding quarter a year ago.

Last week, the MAP prices in the NOLA (New Orleans) region rose by as much as 47 basis points week-over-week to $432 per metric ton.

In 2Q17, Mosaic (MOS) delivered positive shipment growth in each of its segments.

In recent quarters, fertilizer companies have experienced earnings growth deceleration due to unsupportive prices pressured by excess production capacity.

The week ending January 27 was broadly positive for agricultural fertilizer stocks. The VanEck Vectors Agribusiness ETF (MOO) rose by 64 basis points.

Analysts expect Intrepid Potash’s sales to be $35.6 million in 1Q17. For fiscal 2017, analysts expect the company’s sales to be $148.5 million.

Agrium, one of the major agricultural fertilizer retailers, reported 4Q15 earnings per share of $1.52. This beat analysts’ estimates of $1.38, resulting in a 10% positive surprise.

China and India should show rises in potash demand compared to 2016, as both these countries delayed their contract settlements during the year.

Agrium’s management expects 12.5 million–13.5 million tons of exports from China in 2016. We believe this should support Agrium’s nitrogen margins.

In this series, we’ll look at key NPK (nitrogen, phosphorous, and potassium) fertilizer prices last week.

CF Industries (CF) is expected to announce its 1Q16 earnings on May 4, 2016. CF Industries has lost 17% of its value since January 2016, with the stock trading at $33.70 as of April 27, 2016.

MAP (monoammonium phosphate) is the second most used phosphate fertilizer after DAP (diammonium phosphate).

The Fertilizer Affordability Index remained lower for the week ending April 21. Fertilizers were more affordable than the base year.

The world has a problem that’s actually good for the fertilizer industry. This is the world’s population, which is ever-growing, as is food consumption.

On November 7, PotashCorp and Agrium announced that they had received a conditional approval from China’s Ministry of Commerce for their proposed merger.

In Brazil, potash prices were flat at $281 per metric ton in the week ending January 12.

Last week, the Fertilizer Affordability Index, which is issued by Mosaic, declined to 0.83x from 0.85x a week ago.

In the Cornbelt region of the US, the potash prices rose by 31 basis points to $289 per metric ton from $288 per metric ton.

On October 31, CF Industries (CF) reported its third-quarter earnings. The company reported revenue growth of 19.5% YoY to $1.04 billion.

Last week, potash prices were still on the rise despite the weekly decline in nitrogen and phosphate fertilizers.

Last week, DAP (diammonium phosphate) prices were broadly lower week-over-week at most locations.

Last week, the MAP prices in the NOLA (New Orleans) region of the US were flat week-over-week at $430 per metric ton.

Last week, Intrepid Potash rose 5.9% to $3.6. Nutrien (NTR) gained 3.3% to $55.8, while Israel Chemicals (ICL) gained 1.6% to $6.2 per share.

Last week, granular potash prices in NOLA (New Orleans) rose 2.6% to $251 per metric ton, from $245 in the week ended October 5.

Potash prices in Brazil rose the most last week with a rise of 2.3% to $357 per metric ton from $349 per metric ton.

Last week, MAP (monoammonium phosphate) prices were flat in the Brazil and NOLA (New Orleans) regions.

DAP (diammonium phosphate) prices have been rising in 2018 and made new highs in recent weeks. Last week, DAP prices appeared to pause.

The week ending September 21 was broadly positive for the fertilizer sector. MOO rose 2.3% from the week ending September 14.

Last week, potash prices didn’t show movement in NOLA (New Orleans) or the Cornbelt region of the US.

DAP (diammonium phosphate) prices have been rising lately.

Last week, the overall fertilizer sector was broadly positive with six of the six stocks ending in flat to positive territory.